A three-judge panel on the 2nd U.S. Court of Appeals yesterday heard arguments that the city is not immune from the claims of injured workers who responded to the terrorists attacks of September 11, 2001 — despite a state law that could imply they are — and the panel appeared eager to distribute what could amount to more than $1.5 billion in settlements related to as many as 10,000 lawsuits filed by injured workers.

In two hours of oral arguments yesterday before the federal appellate court, the judges appeared compassionate to the ailing workers who are only now seeing their cases presented, several years after they were originally submitted.

The question before the judges is whether the city, its contractors, and the Port Authority of New York and New Jersey, which owns the site, are immune from the lawsuits on the grounds of a state law that prevents governments from being sued if they are responding to an attack.

In the days following the terrorist attacks, the city sought federal aid for relief workers, and was acting in good faith for being on the scene and trying to help with the recovery and clean-up efforts, attorneys for the city argued.

Judge Sonia Sotomayor, however, said the New York State Defense Emergency Act — designed for use in situations when the country is under attack — should have included a tighter definition of immunity had it been meant to shield the city from such lawsuits.

“It they meant to preclude a suit, why not use a language like ‘civil action?'” she asked the attorney representing New York City, James Tyrrell. “Why would the SDEA list a subjective factor, or even put a qualifier in if they meant ‘absolute authority.'”

Judge Richard Wesley said cities across the country have faced similar suits, which he called “garden variety of negligence claims” against workplace safety, for 70 to 90 years.

The judges also heard arguments about the $1 billion the federal government set aside to handle the injured workers’ claims but not yet distributed. When lawyers said the case could take three to four years to reach a jury, Judge Jon Newman interrupted, saying he was concerned that any further delay in the cases would be detrimental to the victims themselves. “It’s a rare case where they have $1 billion just waiting on the table,” he said. “It just cries out, with a case of $1 billion sitting there, to distribute it to the people who are dying.”

An attorney for the Port Authority, Richard Williamson, suggested the court create a second victims’ compensation fund. Congress established the first in 2001, and began paying $7 billion to victims of the attacks and their families.

Last year, U.S. District Judge Alvin Hellerstein in Manhattan ruled that as many as 10,000 workers, including firefighters, police officers, and construction workers who searched for survivors and cleaned up the site, could file suits against the city.